A political piggy bank
The Democratic National Convention starts on Monday in Chicago, capping an extraordinary few weeks since Vice President Kamala Harris became the party’s presidential candidate.
In that time, she has generated momentum and enthusiasm among voters. Some longtime political observers, like the Republican pollster Frank Luntz, are calling it unprecedented.
Just one indicator: Last month, Harris’s campaign said it had raised $310 million, including $200 million in the seven days after President Biden dropped out.
As Democrats gather in the United Center, one focus will be on the Democratic National Committee, the organizational backbone that coordinates the party’s electoral strategy, management and convention. Much of that involves money, and the committee raises millions that it disburses to fight in federal and state elections.
DealBook dug into the numbers and spoke to experts to understand where the committee fits into the wider world of campaign finance and to show how its role has evolved.
The first Democratic Party convention was in 1832. Sixteen years later, at their convention in Baltimore, party leaders established the Democratic National Committee. In 1856, the Republicans did the same, paving the way for the Republican-Democratic juggernaut that has dominated American politics ever since.
Party committees do more than organize the quadrennial nominating festival. (In a twist this year, Harris and her running mate, Gov. Tim Walz, have already won their party’s nominations in a special online roll-call vote.) They communicate the party platform and act as a kind of piggy bank to help finance the campaigns of candidates up and down the ballot.
The Supreme Court’s Citizens United ruling in 2010 was a jolt for fund-raising. That decision cleared the way for unlimited independent expenditures in political races by corporations and other groups, like labor unions, leading to the rise of super PACs and a flood of money.
The D.N.C. was forced to adapt. The new reality meant that billionaire donors had a new lever to pull in politics.
“The money is up everywhere,” Alvin Bernard Tillery Jr., a professor of political science at Northwestern, told DealBook. “It also means that the traditional committees don’t necessarily have control over everything like they did, say, 20 years ago.”
Some predicted that party fund-raising would die, said Matthew Foster, an expert on campaign finance at the School of Public Affairs at American University. Instead, the D.N.C. became a crucial magnet for small-dollar donations from individuals. “People would rather donate to a party than other obscure organizations,” he told DealBook.
The D.N.C. had a built-in advantage. The vaunted ground operation it designed to get out the votes has enabled it to tap into its existing network to connect with grass-roots Democrats. The biggest shift has been to layer digital infrastructure on top of this, with the emergence of new techniques for donating and fund-raising, like the tech platform ActBlue.
Through June 30, the D.N.C. had raised about $285 million. (Data including money raised in July and since Harris became former President Donald Trump’s opponent will be published next week.)
In the 2020 election, when political tensions were especially high, the D.N.C. pulled in a record $491 million, and in 2016 it raised $355 million. With three months to go until Election Day, more big sums will flow.
The way the D.N.C. is distributing the cash is also changing. In this election, staff salaries and transfers to fight races at the state or national level account for almost half of spending. Expenditure on media represents less than 6 percent, down from about 12 percent in 2016. One reason for the shift is that independent super PACs are now able to spend on advertising, allowing the D.N.C. to focus more on other priorities, Brendan Glavin, the deputy research director at OpenSecrets, a group that tracks money in politics, told DealBook.
What next? The rise of super PACs and tax-exempt 527 organizations has flooded races with money and mixed messages that sometimes run counter to the candidate or party position.
Tillery gave the example of a well-funded Democratic super PAC that’s pro-Palestinians, saying it could muddle Harris’s position on the Middle East. “On the other side,” he continued, “a pro-Project 2025 super PAC talking about how Trump is going to do an abortion ban wouldn’t be helpful to Trump.”
Party committees will probably try to do a better job of policing these contradicting messages — no small feat as the D.N.C. and its Republican counterpart are not supposed to coordinate directly with the campaigns, and as super PACs tend to pay more attention to superdonors. — Bernhard Warner and Ravi Mattu
IN CASE YOU MISSED IT
The Justice Department weighs breaking up Google for running an illegal search monopoly. It would be the first time the government sought to dismantle a technology giant since it unsuccessfully tried to break up Microsoft more than two decades ago. The case is being closely watched across the sector, with Apple, Amazon and Meta all facing their own antitrust battles with the government.
Starbucks names a new C.E.O., and the stock soars. The coffee chain poached Brian Niccol, the Chipotle chief, as its new chairman and C.E.O. after being stung by slumping sales and was targeted by activist investors. He was given a lucrative pay package to replace Laxman Narasimhan, becoming the company’s third C.E.O. in the past 18 months.
Mars pulls off the biggest M.&.A. deal of the year. The snack food giant agreed to buy Kellanova, the company behind Cheez-It and Pringles, for nearly $36 billion including debt. Privately held Mars, which is known for chocolatey favorites like Snickers and M&M’s, has been expanding beyond sweets in recent years, looking to attract a more health-conscious consumer.
Stocks rally on strong retail sales and an encouraging inflation report. The S&P 500 finished off its best week of the year, helped by impressive quarterly earnings from Walmart and data showing consumers are spending at a robust pace. Despite that, the latest Consumer Price Index showed that inflation continued to cool, adding to investor hopes that the U.S. economy is headed for a soft landing and that the Federal Reserve will start cutting interest rates next month.
Harris soothes some nerves
Wall Street insiders tuned in with some combination of excitement and apprehension to Vice President Kamala Harris’s first major speech on economic policy, eager for clues on what they might expect if she wins in November.
In her appearance on Friday in the battleground state of North Carolina, Harris unveiled the prospect of an “opportunity economy,” a push to revitalize the middle class and extend many Biden administration policies. But business leaders also heard another clear message: Don’t worry — I’m not going after all of you.
“My view is she focused it on the bad actors,” Robert Wolf, a former C.E.O. of UBS Americas and big Democratic donor, told DealBook. That may not amount to a detailed economic policy vision, but it is a hint of how Harris might approach big business.
Here’s what Wolf and other Wall Street insiders took away from her speech.
Harris dialed down talk about price gouging. When news leaked this week that Harris planned to ban “corporate price gouging,” Wall Street donors, and some economists, were concerned.
But she devoted only a small portion of her speech to the issue, and she specified her target. “Companies are seeing their highest profits in two decades. And while many grocery chains pass along these savings, others don’t,” Harris said. “We need to take action when that is the case.” (This still may not bode well for the proposed merger between Kroger and Albertsons.)
Harris called out certain landlords as contributing to the housing crisis. She has called for assistance of up to $25,000 for first-time home buyers — an initiative that is facing pushback given that the issue is supply, not demand.
But Harris used her speech to peg the high cost of housing and rentals on certain players. “Some corporate landlords collude with each other to set artificially high rental prices, often using algorithms in price-fixing software to do it,” Harris said, possibly a subtle reference to RealPage, the real estate software group that the Justice Department is scrutinizing.
Harris focused on the importance of a secure business environment. She spoke of “creating a stable business environment with consistent and transparent rules of the road.” The line was most likely an effort to draw a positive contrast between business under a Harris administration and under Trump. — Lauren Hirsch
Power players
The relationship between C.E.O.s and government is more complicated than ever, with business leaders often coming under attack when they wade into politics.
In “The Power and the Money: The Epic Clashes Between Commanders in Chief and Titans of Industry,” Tevi Troy, an official in the second Bush administration, looks at the changing relationship between C.E.O.s and presidents.
DealBook spoke to him about what has worked and what hasn’t. This conversation has been edited and condensed for clarity.
What is the most effective approach a C.E.O. can take in Washington?
If somebody leans too hard in one way or the other, really hating the president or really loving the president too much, that can have deleterious consequences.
Jamie Dimon has a brilliant formulation. He calls himself “barely a Democrat.” That appeals to Democrats, who say: “Oh, he’s a Democrat. That’s good.” And Republicans hear him say, “Barely.”
Dimon also used to come to Washington twice a year and started coming twice a month. As a result, whichever administration comes in, he has ties with people.
On the other hand, Henry Luce had a terrible relationship with Franklin Roosevelt, but he went too far in favor of Harry Truman, and Time magazine lost some credibility as a result.
More recently, Elon Musk is going so hard for Donald Trump that he’s really persona non grata on the left.
What is a C.E.O.’s responsibility when it comes to using his or her proximity to power to advocate for other things, like social issues or democracy?
Every citizen has a responsibility to think about larger issues. But C.E.O.s have to worry about the interest of their shareholders, and it’s not necessarily their place to be speaking out on issues that may not be relevant to their company.
Some might argue that a threat to democracy is an issue that affects shareholders.
There have been some, like J.P. Morgan, who said he was going to get involved in trying to help the United States from going under financially, or the Warner brothers, who used their studio to put out propaganda for Roosevelt during World War II.
But now is not the time to be a protest leader as a C.E.O., because the politics are so fraught.
Companies also spend billions lobbying and donating. Which matters more: relationships or money?
When there’s a big battle between two companies within an industry in terms of campaign contributions and lobbying spend, they basically fight each other to a draw.
C.E.O.s can be the decider. They can be the tiebreaker.
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